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versus virtualization.

Salesforce.com and the majority of Software as a Service vendors fall on the side of multi-tenancy -- an architecture where a single instance of a software application serves multiple customers.

“Multi-tenancy is really the future of our industry,” Salesforce.com CEO Marc Benioff said in his off-campus keynote after his scheduled appearance at OpenWorld 2011 was canceled. “We see it in technologies that we all use every day -- Twitter, Facebook, Google, [Oracle CEO Larry Ellison’s] company NetSuite, our company Salesforce, Workday. All the new companies you’ve seen come along are all multi-tenant, shared architectures. It is the most modern, most current of all architectures.”

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Oracle is moving ahead with a different approach, one that admonishes multi-tenancy as unsafe and outdated. The industry giant is instead favoring a cloud virtualization model, where each user’s datawould be put on a separate database and run on a separate virtual machine.

While multi-tenancy has gained large popularity because it dramatically lowers overhead and cost and can reduce carbon emissions, Larry Ellison argued in his OpenWorld keynote speech that it puts enterprise data at risk.

“That’s a very bad security model, to put everyone’s data in the same database,” Ellison said. “It’s called multi-tenancy, and it was the state of the art 15 years ago when [Salesforce] started. I mean, it really was the best we could do 15 years ago.

“They put your data at risk by comingling it with your competitor’s data.”

Benioff countered that multi-tenancy has a “tremendous history of security,” and the back-and-forth battle of ideas continued on. Benioff pointed to social media website Facebook as the ultimate argument for multi-tenancy.

“Virtualization is not the pinnacle of efficiency; the pinnacle of efficiency is multi-tenancy, and the proof point is Facebook,” Benioff said. “What would it take to deliver that on a case-by-case basis to all those customers?”

Multi-tenancy: Is it safe? To say that multi-tenancy is a feature of some clouds would be inaccurate; rather it is a central tenet of cloud computing. Yefim Natis, a distinguished analyst with Gartner, thinks multi-tenancy’s problem isn’t security, but perception.

“I think that, if you look at successful cloud platforms such as Salesforce, I do not believe there are known instances where data has been compromised or hacked, not to my knowledge,” Natis said.

“To say that cloud is inherently less secure, it comes a little bit from ignorance.”

Gartner research published in March last year predicts that 60% of virtualized servers will be less secure than the physical servers they replace through 2012. It states that the main reason was not an inherent flaw with multi-tenancy, but that systems were implemented incorrectly.

What’s behind the Oracle cloud approach? Natis sees Oracle’s new offering, with its absence of multi-tenancy and slow and murky product release schedule, as at best a “hesitant endorsement of public cloud.”

“The reasoning is they would rather cloud disappear, altogether. That’s the reasoning,” Natis said. “It’s not really cloud.”

“They cannot oppose cloud computing. They cannot continue doing that,” Natis said, adding that by the end of the year “every notable vendor will have a PaaS [Platform as a Service] offering.”

Vendors that are outside of the PaaS market are beginning to fight in the space. IBM is the latest to jump into the fray with the launch of SmartCloud earlier this month. While a battle for market share seems likely given the increasing volume of players, the fact that large corporations like Oracle and IBM are entering the space will raise the profile of public cloud itself.

“Another impact of what [Oracle] just did -- users are becoming more interested in public cloud for various purposes,” Natis said. “Oracle must notice that some of its customers are looking to the cloud and considering alternatives.”

While it is clear that the majority of PaaS vendors fall on Benioff’s side of this argument, Oracle’s public cloud is in its formative stages, and few details are known.

“They tell you that you can run the same application on-premises or in their public cloud in the future, and I highlight in the future, in the Java service,” Natis said. “They don’t tell you that the Java service they are running in the cloud is better in any respect. They talk about it being available; they don’t talk about it being good.”

Based on its numerous supporters and their driving of the market, multi-tenancy won’t be going anywhere. Oracle and others entering the space now have the challenge of showing users there is a different approach that is viable.

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